These traditional services that are an essential part of local and international trade are now routinely referred to as LSPs (Logistics Service Providers) and includes US Outsourced Warehousing and Distribution, US Outsourced Order Fulfillment, International shipping, and everything in between. In some cases all three services are offered by one company, in others, a company may offer only one or two of these services. Regardless, all will be referred to as LSPs.
The Importance of Logistics. Logistics is not simply moving goods from point A to point B. To the contrary, whether outsourced or not, if the logistics cost can be reduced, the price of particular products will be reduced, the profit will increase thereby increasing the opportunity to lower prices which will encourage demand. The impact upon a region or country becomes obvious.
The Role of Outsourcing.
Worldwide, as well as in the United States, LSPs are growing at rates far greater than many other service providers, often because business managers seek to relieve frustration in managing functions that are considered non-core competencies, reduce costs and improve customer satisfaction. Outsourcing logistics functions transforms companies as they focus on core strengths, allowing them to meet corporate profit targets.
The challenge to LSPs, whether freight forwarder, warehouse, carrier or other type of provider is that the LSP environment is highly competitive. LSPs must strive to maintain and gain customers with a winning combination of competitive price and a high level of customer service. Specifically, the most important single competence of an LSP is a thorough knowledge and understanding of the local market they serve.
Additionally, LSPs must have excellent management, knowledgeable staff, and employ best practices applying the latest available technology. Equally important is effective marketing, including online advertising.
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